Senator the Hon Simon Birmingham

Will Goodings: 21 minutes after 7:00, we're joined by South Australian Senator and Federal Finance Minister Simon Birmingham. Senator, good morning to you.

Simon Birmingham: Good morning, guys. Great to be with you.

David Penberthy: Good to have you on Birmo, a very different mood today versus the start of the programme yesterday. We're all we knew for sure was that the naval group contract had been torn up. And in terms of jobs that will flow from this, are you confident that the number of jobs that it's going to create is going to eclipse what would have happened under the naval group contract?

Simon Birmingham: It's in the long run. Absolutely. What we're creating in the new nuclear powered submarines will be even more technologically sophisticated, even larger in terms of their size and dimension. They will need even more people to crew them in the future. But indeed, they'll need no doubt more in terms of the build and the build of the infrastructure and all of those things. And that, of course, is only one part of what was announced yesterday with the commitments to upgrade the Collins class to keep the full cycle docking here to do the air warfare destroyer upgrades here in Adelaide as well. All of that creating quite a strong, very strong jobs pipeline for many years to come. Mm-hmm.

Will Goodings: Interesting how strong that pipeline is. What's the local build component of the new subs?

Simon Birmingham: So the precise specs on that is something we're going to work through with the US and UK. But everybody should be reassured that they want us to succeed in this, not just in having the nuclear powered submarine capabilities for Australia's security, but also in having the capability to build them, to sustain them, to maintain them, to operate them, as do all of that safely. And so with the US and the UK is not a case that they're going to be squabbling with us over how much work is done here or there. They actually want to see Australia add to the overall alliance capabilities across our countries in being able to produce and build more subs, broader fleets that can enhance the strategic balance across the world.

Will Goodings: Well, we had to squabble with Naval Group about that component. So it sounds like at very least, it won't be less than what we committed to with Naval Group.

Simon Birmingham: Well, it's each of these boats is a bigger boat, as I said before. So you start from even a bigger prism of what work is there? And, then of course, how that is cut up and shared depends in part on technological aspects. As we've indicated, the nuclear reactor itself will be built overseas and will be inserted then into the boat here in Australia. But that's no different from the fact that the main motors on the old Collins class were equally bought from overseas and inserted here in Adelaide. So there are different components depending on where they can be sourced. But I have no doubt there will be many hundreds of local Australian companies scattered right throughout Australia, not just here in SA, who will benefit from contracts under these arrangements in the years to come.

David Penberthy: Birmo, A lot of the background to the deterioration of our relationship with China happen in the trade space, and a lot of it happened when you were the trade minister sort of sitting there lonely nights waiting for your trade minister equivalent in Beijing to pick up the phone and talk to you, on the face of it and brutal sort of front bar description of this of this security arrangement, to me, it looks like this is Australia saying that China is basically a lost cause and that we're going to put all of our security eggs in this basket and that we regard them as almost irretrievably hostile towards our interests. Is that too harsh an assessment? And if it's not, what would be your explanation of what it means to the Chinese government?

Simon Birmingham: There's no doubt that Australia, for most of our history in in modern times, has managed to be a long way away from most of regional and global conflicts and from the competition that's existed around the world in a military sense. That's no longer the case. Our region has seen large increases in terms of militarisation. There's much more competition. And indeed, some of that comes very much from China. As you've acknowledged, that requires us to respond in different ways to make sure we keep a balance across the region. Our interest is just that in having a balance that helps to support stability, security. We want to make sure that that Australia and every other country in this region gets to operate with respect for our sovereignty and the ability to maintain the types of freedoms that we all enjoy.

David Penberthy: But can we still have a relationship with China? I mean, even thinking about like in the university space, I mean, we've got a Confucius Institute just down the road here on North Terrace. There's a lot of businesses that still trade with China. It's hard to see how the sort of simpatico vibe is going to continue now.

Simon Birmingham: Not only can we, but we should, and we want to reinforce that that this is Australia making sovereign decisions about our military capabilities just as we respect any other country doing so, just as China does so. But that doesn't mean that we equally don't want to have diplomatic relations, trade relations, relations at a cultural level, at a community level. The Chinese community in Australia remains a very, very important part of our nation and contributes enormously, and we want to continue to work with them and where we can with China is as much as possible into the future.

Will Goodings: Finance Minister and Liberal Senator for SA Simon Birmingham. Thank you for joining us this morning on Friday.

Simon Birmingham: Thanks, guys. My pleasure.